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  • Company Law: Memorandum of Association & Article of Association

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    This document provides information on the Memorandum of Association (MOA) and Articles of Association (AOA), which are two essential documents required for company formation under Indian law. The MOA defines the fundamental limitations of a company's powers and acts as its constitution. It must include clauses for the company's name, objectives, liability, capital, and association. The AOA outlines the internal regulations and management of a company, including the rights and duties of directors and shareholders. It addresses matters like share transfers, meetings, and capital alterations. While the MOA establishes a company's relationship with outsiders, the AOA regulates relationships between the company and its members. The MOA defines the company's scope and

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    This document provides information on the Memorandum of Association (MOA) and Articles of Association (AOA), which are two essential documents required for company formation under Indian law. The MOA defines the fundamental limitations of a company's powers and acts as its constitution. It must include clauses for the company's name, objectives, liability, capital, and association. The AOA outlines the internal regulations and management of a company, including the rights and duties of directors and shareholders. It addresses matters like share transfers, meetings, and capital alterations. While the MOA establishes a company's relationship with outsiders, the AOA regulates relationships between the company and its members. The MOA defines the company's scope and

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    117 views12 pages

    Company Law: Memorandum of Association & Article of Association

    Uploaded by

    Ashish Kumar Mahapatra
    This document provides information on the Memorandum of Association (MOA) and Articles of Association (AOA), which are two essential documents required for company formation under Indian law. The MOA defines the fundamental limitations of a company's powers and acts as its constitution. It must include clauses for the company's name, objectives, liability, capital, and association. The AOA outlines the internal regulations and management of a company, including the rights and duties of directors and shareholders. It addresses matters like share transfers, meetings, and capital alterations. While the MOA establishes a company's relationship with outsiders, the AOA regulates relationships between the company and its members. The MOA defines the company's scope and

    Copyright:

    © All Rights Reserved
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    of 12

    COMPANY LAW

    Memorandum of Association & Article of Association


    PRESENTED BY:
    1. SONALI MISHRA (62)
    2. SATYABRATA ROUTRAY (52)
    3. SAI SOBHAN NAYAK(49)
    4. PRITISH PATTANAIK(41)
    5. ASHISH KUMAR MAHAPAPATRA (15)
    INTRODUCTION
    The formation of company involves preparation and filling of several essential
    documents. Two basic document are:
    1. Memorandum of Association
    2. Article of Association
    MEMORANDUM OF ASSOCIATION
    (MOA)
    • The first step in the formation of a company is to prepare Memorandum of
    Association. Which is also called Constitution of company.
    • MOA of company is its charter and defines the limitation of the powers of a
    company. It contains the fundamental condition upon which alone the company
    is allow to be incorporated.
    • According to the sec (56) of the companies act 2013 MOA of a company as
    originally framed or altered from time to time in pursuance of any previous
    company law or of this act.
    CHARACTERISTICS OF MOA
    •MOA states its aims, objectives, and the nature of business activities conducted by the company.
    •It informs about the scope of activities of the company and defines boundaries within which the
    company must conduct its activities.
    •It is prepared by promoters before registration with the help of experts and the secretary.
    •At least 7 member in case of a public company and 2 members in case of a private company and 1
    person in case of one person company must sign the MOA.
    •It is prepared and filed with the registrar of the companies for registration , for obtaining certificate of
    incorporation.
    •It is compulsory document for every company whether private or public, with capital or without
    capital.
    •It defines and represents the relationship between the company and the outsiders.
    •It contain 6 clauses : name, address, object, liability, capital & association clause.
    •Alteration of MOA is almost impracticable because the changes can be made with great difficulties.
    •MOA is a public document. Being the constitution of the company, it is open to public inspection and
    scrutiny.
    •Any activity which is ultra Vires the MOA is void and treated as illegal.
    ESSENTIAL ELEMENTS OF MOA
    According to sec 4 of company Act 2013 the following information is mandatory in MOA:
    1. Name Clause
    • For a public limited company, the company must have the word ‘Limited’ as the last word & for the
    private limited company, the company name must have the words ‘Private Limited’ as the last words.
    ( this is not applicable for companies like foundation, federation, association, etc..).

    2. Registered Office Clause


    • It must specify the State in which the registered office of the company will be situated.
    3. Object Clause
    • It must specify the objects for which the company is being incorporated. Further, if a company changes
    its activities which are not reflected in its name, then it can change its name within six months of
    changing its activities.
    4. Liability Clause
    • It should specify the liability of the members of the company, whether limited or unlimited. Also,
    A. For a company limited by shares – it should specify if the liability of its members is limited to
    any unpaid amount on the shares that they hold.
    B. For a company limited by guarantee – it should specify the amount undertaken by each member
    to contribute to:
    i. The assets of the company when it winds-up. This is provided that he is a member of the
    company when it winds-up or the winding-up happens within one year of him ceasing to be a
    member. In the latter case, the debts and liabilities considered would be those contracted before
    he ceases to be a member.
    ii. The costs, charges, and expenses of winding up and the adjustment of the rights of the
    contributors among themselves.
    5.Capital Clause
    • This is valid only for companies having share capital. These companies must specify the amount of
    Authorized capital divided into shares of fixed amounts. Further, it must state the names of each member
    and the number of shares against their names.
    6.Association Clause
    • The MOA must clearly specify the desire of the subscriber to form a company.
    ARTICLE OF ASSOCIATION
    (AOA)
    AOA the document which lists the regulations which governs the running of
    company setting out the rights and duties of the director and stakeholders
    individually and in a meeting.
    CHARACTERISTICS OF AOA
    Features of Articles of Association are: 
    1. It is an important document which regulates the internal management of a company. 
    2. It contains laws, by-laws, rules and regulations of the company. 
    3. It is an alterable document. Changes can be made in AOA according to the provisions of
    Companies Act. 
    4. Articles are framed according to the pursuance of the present Companies Act. 
    5. It defines the rights, power and duties of the directors. 
    6. For Private companies, there is no formal model of AOA. It is compulsory for them to make
    their own AOA.
    ESSENTIAL ELEMENTS OF AOA
    • Articles generally contains the following matters ;

    • The Articles generally contains the following matters


    8. Transfer and transmission of shares.
    • 1. Exclusion wholly or in part of Table F.
    9. Nomination.
    • 2. Adoption of preliminary contracts. 10. Forfeiture of shares.
    • 3. Number and value of shares. 11. Alternation of capital.
    12. Buy back.
    • 4. Issue of preference shares.
    13. Share certificates.
    • 5. Allotment of shares. 14. Dematerialization.
    • 6. Calls on shares. 15. Conversion of shares into stock.
    16. Incorporation of Companies and Matters.
    • 7. Lien on shares.
    17. Incidental Thereto.
    MOA VS AOA
    BASIS FOR COMPARISON MEMORANDUM OF ASSOCIATION ARTICLES OF ASSOCIATION

    Meaning it contains all the fundamental information which are required for the It contains all the rules and regulations that governs the
    incorporation of the company. company.

    Type of Information contained Powers and objects of the company. Rules of the company.

    Status It is subordinate to the Companies Act. It is subordinate to the memorandum.

    Retrospective Effect The memorandum of association of the company cannot be amended The articles of association can be amended retrospectively.
    retrospectively.

    Major contents A memorandum must contain six clauses. The articles can be drafted as per the choice of the company.

    Obligatory Yes, for all companies. Only a private company is required to frame its articles while a
    public company limited by shares.

    Compulsory filing at the time Required Not required at all.


    of Registration

    Alteration Alteration can be done, after passing Special Resolution in Annual Alteration can be done in the Articles by passing Special
    General Meeting and previous approval of Central Government or Resolution at Annual General Meeting.
    Company Law Board is required.

    Relation Defines the relation between company and outsider. Regulates the relationship between company and its members
    and also between the members inter se.

    Acts done beyond the scope Absolutely void Can be ratified by shareholders.
    THANK
    YOU

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